As India Halts Trade With Pakistan Post J&K Attack, Here’s How It May Source Indian Goods Via Dubai, Singapore

Amid a trade halt between India and Pakistan after the Pahalgam terror attack in Jammu and Kashmir, traders may find a way to import goods from Delhi to Islamabad via other countries like Dubai, Singapore, and Colombo. Many firms are using ports located in these countries to send Indian goods to Pakistan via a third-country route to bypass the trade ban and sell them at a higher price.

Companies send Indian goods worth $100 billion via third-country trade routes annually to sell these items at a higher price, reported news agency ANI, citing a Global Trade Research Initiative (GTRI) report. The news agency added that some firms may use the option after Pahalgam terror attack to send items to Pakistan,

"GTRI estimates India's Goods worth over USD 10 billion reach Pakistan via this route, annually," ANI quoted the research group focused on international trade.

India-Pakistan Trade via Third-Country Route: How Does It Work?

Indian goods are sent to international ports in Dubai, Colombo and Singapore from their origin country. These goods are received by an independent firm at these ports, which offloads and keep them in bonded warehouses at the port, GTRI added in its note. These items can be stored without paying duties while in transit.

Independent firms modify the documents and labels to change the country of origine to dodge restrictions, reported ANI. "For example, Indian-made goods may be relabelled as "Made in UAE". After this change, they are shipped to countries like Pakistan, where direct trade with India is not allowed," the GTRI note added.

Higher Price of Indian Goods Due to Third Country Route

Although the method helps Indian firms to export the items to Pakistan without any scrutiny, it also increases the price of these goods. Explaining the impact of trading goods via this route, ANI explained, if a firm exports auto parts from India to Dubai worth $100,000, then the same item, after relabelling, will be sold at a price of $130,000 in Pakistan.

Higher cost of these items helps traders in covering extra expenses like paperwork, storage, etc.

India-Pakistan Trade Halt

The Indian government few days ago, announced a trade halt with Pakistan and a range of diplomatic measures in the aftermath of the Pahalgam terror attack in Jammu and Kashmir on April 22. The Indian government cancelled all Pakistani visas and reduced the strength of the Pakistan High Commission in India. It also announced to put the decades old Indus Waters Treaty in abeyance. The Attari Wagah Border's Integrated Check Post (ICP) was closed last week. The government urged Pakistani nationals who came to India through the route to return to their country within 40 hours.

Pahalgam Terror Attack in Jammu and Kashmir

More than 25 tourists were killed and several others were injured in a terrorist attack in Jammu and Kashmir's Pahalgam on 22 April. The attack occurred when multiple armed men in camouflage dress appeared from forests near a meadow in the Baisaran Valley, and targeted people on the tourist location. The brutal killings in the terrorist attack has sparked a nationwide outrage and evoked sharp reactions from global leaders.